RBI Proposes one hour time lag for Digital transactions of more than Rs 10K to avoid online fraud

The Reserve Bank of India (RBI) has given some new suggestions (proposals) to make digital payments more secure. Their objective is to prevent online fraud, which has increased rapidly in recent times. RBI has released a discussion paper on Thursday, in which four main changes have been discussed.

The biggest proposal is that digital transfers of more than Rs 10,000 will no longer be credited instantly. There will be a cooling-off period of approximately 1 hour for such authorized push payment (APP) transactions. Within this one hour, if the user feels that the transaction is wrong or fraudulent, they can cancel it. RBI says that fraudsters often make people transfer money in a hurry, so this time will provide people a chance to think and save themselves.

The second major change is for those who fall in the sensitive category (like the elderly and the disabled). If they make transactions of more than Rs 50,000, they may have to take the approval of a trusted person (nominated individual). Its purpose is to protect these people from fraud by changing identity or by intimidation.

RBI has also proposed strictness on mule accounts (bank accounts that are used in fraud). For this, it has been suggested that in the accounts that have not been fully verified, only about Rs 25 lakh will be able to receive money in a year. If more money comes than this, then the bank will stop it and investigate. That money will be kept as shadow credit until the investigation is completed and can be returned if needed.

Apart from this, the RBI has also proposed a kill switch to make the digital payment system more secure. This means that if someone feels that his account or phone is being used for fraud, he will be able to immediately stop all his digital transactions. Also, people will be able to set limits on their UPI, cards and net banking or switch the payment mode on and off.

RBI has also said that digital frauds, especially APP frauds, are increasing rapidly in the country, where people get deceived and transfer money on their own. For this reason, the need to bring these new rules has been felt. Right now, these are all suggestions; no final rules have been made. RBI has sought opinions on this from all people and companies till May 8. After the deadline, these suggestions can be converted into final rules.

The RBI says that its objective is to make digital payments secure while maintaining the convenience of the people; that is, the right balance should be maintained between both security and convenience.